While preparing its draft final accounts for the year ended 31 March 24Y9 and its draft balance sheet as at 31 March 24Y9, LMN Ltd discovered a mistake in the stock lists used to compute the stock value as at 31 March 24Y9 The entry was Stock item Number Cost per unit Total cost V456 75 6 20 465 Required (a) What is wrong with this particular entry (b) What would the effect of the error have been on (i) the value of stock as at 31 March 24Y9 (ii) the cost of goods sold for the year ended 31 March 24Y9 (iii) the net profit for the year ended 31 March 24Y9 (iv) the total for Current Assets as at 31 March 24Y9 (v) the Owners Capital as at 31 March 24Y9

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Question: While preparing its draft final accounts for the year ended 31 March 24Y9 and its draft balance sheet as at 31 March 24Y9, LMN Ltd

While preparing its draft final accounts for the year ended 31 March 24Y9 and its draft balance sheet as at 31 March 24Y9, LMN Ltd discovered a mistake in the stock lists used to compute the stock value as at 31 March 24Y9. The entry was:

Stock item	Number	Cost per unit	Total cost
V456	75	£6.20	£465

Required: (a) What is wrong with this particular entry? (b) What would the effect of the error have been on: (i) the value of stock as at 31 March 24Y9? (ii) the cost of goods sold for the year ended 31 March 24Y9? (iii) the net profit for the year ended 31 March 24Y9? (iv) the total for Current Assets as at 31 March 24Y9? (v) the Owner’s Capital as at 31 March 24Y9?

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